China’s energy sector is changing rapidly, with major investments in renewable energy and efforts to reduce carbon emissions. However, the growing reliance on gas-fired power plants may hinder the country’s energy goals.
Gas Power Expansion in China
In 2024, China installed 19.5 gigawatts (GW) of new gas-fired power capacity, leading the world. This growth, while notable, was surpassed by 30.5 GW of coal power and an impressive 355 GW of renewables. China now has 152.8 GW of gas power plants, second only to the United States’ 556 GW.
Despite its expansion, gas power contributes only 3.2% of China’s electricity, far behind coal, which generates over 50%. While gas is marketed as a cleaner alternative to coal and a complement to renewable energy, its high costs and supply issues raise doubts about its future role.
Gas in China’s Energy Mix
Gas power offers advantages like higher efficiency, lower carbon emissions per kilowatt-hour, and smaller land needs for plants. However, these benefits are offset by high costs and unreliable supply. Reports from the Institute for Energy Economics and Financial Analysis reveal that gas power’s share in China’s energy mix has remained stagnant over the last decade, even as renewables have grown.
Advocates say gas can quickly increase production to meet peak electricity demand during low wind or solar output. The 2024 “Natural Gas Utilization Management Measures” supports gas for “peak-valley” load management. Yet, most new gas units in China are combined-cycle gas turbines, better suited for steady baseload generation than for flexible demand management.
Challenges in Gas Supply and Costs
China is the fourth-largest natural gas producer globally but struggles to meet demand. Around 40% of its gas is imported via pipelines or as liquefied natural gas (LNG). This dependency inflates costs, making gas power much pricier than coal.
A 2017 gas shortage highlighted these challenges. A rapid shift from coal to gas heating caused demand to spike, leaving many families without winter heating. Industries and power plants also faced severe disruptions, exposing the fragility of China’s gas supply chain.
Subsidies support gas power in affluent coastal regions where governments can afford to reduce costs. However, this dependence on subsidies raises concerns about the long-term viability of gas power.
Sichuan’s Gas Power Growth
Sichuan province illustrates the complexities of gas power in China. Rich in gas resources, Sichuan’s capacity grew from 0.7 GW in 2023 to an expected 11.2 GW by 2025. This increase aimed to address power shortages caused by extreme weather that reduced hydropower output.
Despite its resources, Sichuan faces competing gas demands. It exports 12 billion cubic meters (bcm) of gas annually, with plans to increase to 32 bcm by 2027. The new gas plants will consume 8.4 bcm annually, potentially causing supply shortages.
Energy Security and Overcapacity
Guangdong province operates China’s largest fleet of gas power plants, relying heavily on imported LNG. Geopolitical events, like the Russia-Ukraine war, have exposed the risks of this reliance. In 2022, rising LNG prices forced many Guangdong plants to shut down, reducing gas power generation by 7%.
Despite these issues, Guangdong is expanding gas power capacity. By 2026, it plans to add 23 GW of coal and 13.5 GW of gas power, raising concerns about overcapacity.
The Future of Gas Power in China
China’s renewable energy growth reduces the need for gas power. The country aims to peak carbon emissions by 2030 and achieve carbon neutrality by 2060, with renewables playing a key role. Improved grid infrastructure and energy storage can further lessen dependence on gas as a transitional energy source.
Gas power in China appears to be a temporary measure rather than a long-term solution. As renewables continue to grow, the high costs and supply challenges of gas power make its future uncertain.
